U.S. Gross Domestic Product
Fourth Quarter 2009 GDP Rises to 5.9 Percent
Feb. 26, 2010
Istockphoto
GDP figures suggest the U.S. economy
is becoming increasingly export driven.
The U.S. economy grew by a whopping 5.9 percent at the end of 2009 in a volatile turnaround after beginning the year down 6.4 percent. Manufacturing rebounded significantly, but consumer spending remains low. U.S. GDP is $14.46 trillion.
The U.S. gross domestic product (GDP), the total value of all goods and services, reached its highest point in over six years to end 2009 at 5.9 percent, according to the second GDP quarterly estimate released earlier today by the U.S. Commerce Department. The figure was an increase over the advance estimate of 5.7 percent issued last month. Not since a 6.9 percent increase back in the third quarter 2003 has the economy realized such growth.
Manufacturing activity to replenish depleted inventories accounted for some 65 percent of the quarterly figure followed by exports, personal consumption and non-residential fixed investment. A decrease in government consumption of 4 percent reduced fourth quarter GDP.
Exports, mostly of manufactured goods, rose 30 percent from the previous quarter and has now increased for the second straight quarter after four consecutive quarterly declines, reemphasizing the importance of exports to the current U.S. economy. Software and computers increased 18.2 percent from the previous quarter.
However, consumer spending, one of the principal drivers of economic growth, represented only 20 percent of the fourth quarter GDP figure and it declined 37 percent from the third quarter. In the third quarter, consumer spending represented some 89% of GDP growth while manufacturing growth improved slightly.
Despite two consecutive quarters of growth, George Magnus, economic advisor at UBS, remains cautious, "This recovery is entirely dependent on the unprecendented largesse of governments and central banks...the recovery is built on very short-term foundations."
The volatility of quarterly GDP growth from the beginning of 2009 to the end of the year is an indication of uncertainty as well as an economy driven more by external factors such as monetary policy and government stimulus rather than solid private-sector growth. In current dollar figures, the United States GDP had reached $14,461.7 (in millions).
